Keep Life Insurance in Mind During a Divorce

Keep Life Insurance in Mind During a DivorceGoing through a divorce is a difficult time for most people. There is a lot to consider such as the division of assets, child custody, alimony, and many other things. Life insurance may not be foremost in your mind, but it’s important to consider it as you reach a settlement agreement.

Be sure to review the life insurance policies you jointly own with your spouse so you can make a practical financial decision about them. Consider if the policies are in place to cover daily living expenses, college tuition, mortgages, or all of these things. Divorcing spouses often have new financial conditions, and should review their life insurance policies in the context of their new situation. Below are a few things to keep in mind as you evaluate your policies and consider additional policies, from Bankrate:

  1. Check the beneficiaries on your life insurance. You want to make sure they still make sense. For example, if you continue to have your ex-spouse as a beneficiary on your policy, upon your death, he or she could get the benefit, not your current spouse.
  2. If you are depending on a life insurance policy to provide financial means to take care of your children if your ex-spouse were to pass away, you should make sure that you are the life insurance policy owner. Otherwise, your ex-spouse could remove you as a beneficiary or stop paying on the policy.
  3. You may need to change the amount of the benefit of a life insurance policy when you divorce. If you are downsizing, you and your ex-spouse may not need as much coverage any longer.
  4. If you and your spouse do not have a life insurance policy, now may be the time to get one, particularly if one spouse is paying child support or alimony to the other one. You want to make sure there is a policy in place to cover those expenses so the surviving ex-spouse has the financial support he or she needs.

Financial situations often shift in divorce, so look at what you will need from your spouse in the event of his or her passing. It’s essential to have a trusted legal and financial advisor as you go through a divorce, so be sure to consult a reputable attorney. If you have any questions about your life insurance policies or would like to discuss a new policy, contact one of our knowledgeable agents at AssuredPartners NL. Our agents are happy to get you the information you need.

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